Posts tagged ‘Emily Badger’

UberX Driver – Your Private Underpaid Driver

(Also see Craigslist Uber Scam #UberScam)

Potential UberX drivers, do not rely on what Uber tells you about how much you will make. The inflated figures Uber bandies about on Craigslist and in its PR about how much you might make are 1) inflated, and 2) before expenses. So you must discount what you make from Uber by 50% to account for Self Employment taxes (remember that you will be paying both the employee and the employer portion of these), fuel, depreciation, maintenance, and income taxes.

And after Uber has been in a city for a while, and after Uber runs its promotional discount during which drivers do not take a hit, Uber will unilaterally cut rates with little advance notice to drivers, and you will then make even less (and if you unwisely used Uber-arranged financing to buy a car, you are really stuck).

Even before your costs and deductions, Uber’s take is more like 25% of the “fare” charged to riders after Uber deducts the “Safe Rides Fee” ($1 per ride) and its 20%. Yet Uber shows the rider the top-line “fare” to the rider and to you as if that is what you earn. It’s not.

Uber’s “Safe Ride Fee” of $1 per ride is shown to the rider as part of the fare, but Uber shows the $1 fee separately when it pays drivers. So Uber makes, at the outset, $1 on every single trip. #UberLies

For example, a $6 “fare” will result in the driver being paid $6 – $1 Safe Rides Fee = $5 – (20%) $1.00 = $4.00. $4.00 / $6 = you making 67% of the “fare”. Uber’s take is more than 30%. (A $10 fare results in the driver being paid $7.20, which means Uber’s take is 28%, not 20%.) And if you think “fares” under $10 are unusual, especially after a rate cut, think again.

Uber gets so much positive press because it is allegedly “high-tech” and “innovative” and “disruptive”. But it is building its valuation on a very shaky foundation of grabbing market share by lowering rates and thus lowering driver quality and increasing driver churn. And many journalists who cover Uber have no clue about and are not interested in the misrepresentations of “income” that Uber uses to recruit drivers. After all, most journalists, like most UberX riders, love riding around for cheap, without wanting to know that UberX driver car equity is helping pay for that cheap ride.

Don’t believe us? Then read the stories linked below and listen to the Columbus, Ohio UberX driver who quit (YouTube at bottom). You have been warned.

Some Uber drivers say company’s promise of big pay day doesn’t match reality, by Luz Lazo
Uber’s EPIC blunder, on
Beautiful Illusions: The Economics of UberX, by Justin Singer
Ride-share service Uber drivers say pay is shrinking, by William D’Urso
Driving in LA since the latest pay cut, on
Uber’s Battle Against Its Drivers Continues, by Olivia Nuzzi
What Uber Isn’t Telling uberX Drivers, by Nate Boroyan

PS. Are you sure your auto insurance covers you? Are you sure your policy won’t be canceled if your agent finds out?

Uber as a company is very disrespectful of its (mostly brown and black male) drivers. After Uber runs it promotions discounting rates (especially UberX), and stressing that the drivers are not losing anything, at the end of the promo period Uber then announces to its riders that lower rates are here to stay, making the decision unilaterally and with only a few hours advance notice to UberX drivers. The new rate reduction DOES impact drivers as the entire rate reduction comes out of drivers’ pockets. (In some cities that have had recent rate cuts, some UberX drivers did not work the Labor Day weekend to protest those rate cuts.)

Uber has recently pulled this underhanded trick on UberX drivers in Boston, Washington DC, London, Los Angeles, NJ, Tampa, Fresno, and Seattle, among other cities. So, current and potential UberX drivers, be prepared to see Uber unilaterally cut your fares by 15% to 20% while letting riders know how great Uber is for cheap rates, and giving drivers little advance notice of the new “improved” 15% to 20% pay cut.

In response to Uber unilaterally lowering rates, many Uber drivers are now attempting to cause surge pricing.

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Assorted Links – 2/19/12

  • Lessons of a very sexy pirate costume – “I was in love with my own incongruity – being a poetry-spouting college graduate in a pleather miniskirt. And I loved this notion of doing something at which I was entirely unsuited, and which seemed to go so much against my personality. I would never have said it at the time, but I very much believed I was above being a fun-loving pirate wench selling shots. I had read Meno and lived in cardigans and went to museums for fun. I was a terrific little snob who thought she knew everything, and subsequently, I was about to learn a great deal. … As ridiculous as it sounds, that was the first time I became aware that clever people are buried in every nook and cranny of life. It is astonishing that no one pointed this out to me sooner.
  • Libertarians: A matter of perspective
  • The nexus of elite formation and higher education for American New Class – “The system of high school college placement and higher education itself induces fantastic risk aversion, and that is accelerating, in large part on account of grade inflation that leave students in high school (applying to college) and in the university compressed against a top grade – in which there is mostly room to fall and fail. When the median grade in the liberal arts is an A-, you mostly have only to go down and given the cost of the credential and its consequences – well in excess of any educational value in the liberal arts – you will act in the most risk averse, strategic way and take only classes in which you already know you will do at least that well. The analogue of risk aversion in higher education in real life is downward mobility.”
  • Think Tanks Are Nonpartisan? Think Again – “One of the strangest institutions in Washington – and perhaps the hardest to comprehend from the outside – is the think tank, that quasi-academic, sort-of-political organization that offers, as its primary output, ideas. Universally, think tanks claim to be nonpartisan, and as tax-exempt nonprofits, this is a basic requirement in the tax code. But most people in Washington know the ideological leanings of think tanks that may obscure this fact in their titles: There’s the Cato Institute (libertarian), the Heritage Foundation (conservative), the Brookings Institution (moderate liberal) and the Center for American Progress (progressive).”

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  • CBO: Longest Period of High Unemployment Since Great Depression – “After three years with unemployment topping 8 percent, the U.S. has seen the longest period of high unemployment since the Great Depression, the Congressional Budget Office noted in a report issued today. And, despite some recent good news on the economic front, the CBO is still predicting that unemployment will remain above 8 percent until 2014. The report also notes that, including those who haven’t sought work in the past four weeks and those who are working part-time but seeking full-time employment, the unemployment rate would be 15 percent.”
  • Over-regulated America – “The home of laissez-faire is being suffocated by excessive and badly written regulation. … Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. The other force that makes American laws complex is lobbying. The government’s drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours.
  • The Case For Dying Broke – “In your 60s live off taxable accounts and your corporate pension. Leave your Social Security and IRA untouched until you’re 70. Deferring Social Security benefits buys you, in effect, an incremental inflation-protected annuity. Deferring the IRA cash-out makes tax sense. When you turn 70 put a third to a half of your money into fixed annuities, using the IRA. Most of the outlay should be for immediate annuities. A sliver should be used to buy an annuity that kicks in only if and when you reach age 80. That’s to keep up with inflation. For every dollar invested at age 70, a male can get 7.4 cents of immediate annual income or 20 cents of annual income starting a decade later. With your basic needs covered you can take big risks with the rest of your money. Put it in stocks and junk bonds.”

. . . . . . . . .

  • Mandatory Drugs Tests by Record Companies, Media Scoldings, and Other Helpful Suggestions for Preventing Further Whitney Houstons – “One of Dr. Drew’s recent show guests suggested that record companies start mandatory drug testing. Drew [Pinsky] said ‘I love that.'”
  • How much would (did) it cost to build the Death Star? – A LOT!
  • Liberals, Don’t Homeschool Your Kids – “This overheated hostility toward public schools runs throughout the new literature on liberal homeschooling, and reveals what is so fundamentally illiberal about the trend: It is rooted in distrust of the public sphere, in class privilege, and in the dated presumption that children hail from two-parent families, in which at least one parent can afford (and wants) to take significant time away from paid work in order to manage a process—education—that most parents entrust to the community at-large. … Of course, no one wants to sacrifice his own child’s education in order to better serve someone else’s kid. … If progressives want to improve schools, we shouldn’t empty them out. We ought to flood them with our kids, and then debate vociferously what they ought to be doing.” Charles Murray, author of Coming Apart, agrees with the author, except he says that what school your kids attend doesn’t really matter. He sent his children to public schools.
  • Home-schooling demographics change, expand – “There was a time when Heather Kirchner thought mothers who home-schooled their children were only the types ‘who wore long skirts and praised Jesus and all that.’ … Secular organizations across the country report their numbers are growing. Though government records indicate religion is still the driving force in home schooling, members of these organizations say the face of home schooling is changing, not because of faith, but because of what parents see as shortcomings in public and private schools.”

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